[Exclusive] Coupang Strengthens ESG... Creating the 'Second Fresh Back'

Coupang Introduces Eco-Friendly Packaging for Standard Delivery... Plans to Fully Replace Paper and Plastic Within Years
Introduced 'Fresh Bag' for Dawn Delivery Last Year with 95% Return Rate
Packaging Cost Stabilization Also a Factor... Variables Include Environmental Charges Increase

A Coupang delivery vehicle parked in a parking lot in Seocho-gu, Seoul.
[Photo by Yonhap News]

[Asia Economy Reporter Junhyung Lee] Coupang, which received a poor ESG (Environmental, Social, and Governance) evaluation due to the use of disposable packaging materials such as vinyl, is focusing on developing eco-friendly packaging materials to replace vinyl. Coupang also received low scores in the ‘E (Environment)’ category in last year’s ESG evaluation, with assessments indicating that the "environmental sector is weak," making this a key issue to address. Additionally, the fact that competitors are increasingly investing in eco-friendly delivery is accelerating Coupang’s efforts.

According to industry sources on the 28th, Coupang has been developing and exploring eco-friendly packaging materials with several partners since last month. The full-scale introduction is expected to take place by August at the latest. Coupang, which handles a large volume of deliveries, plans to introduce 32.5 million reusable packaging materials annually for general delivery and aims to completely replace most vinyl packaging materials with eco-friendly ones within the next few years. Coupang is also actively recruiting related personnel. Recently, it has sought experts majoring in packaging materials and specialists in new packaging development and design.

Last year, Coupang introduced the reusable ‘Fresh Bag’ (an insulated ice bag) exclusively for Rocket Fresh, its fresh food dawn delivery service, and achieved a recovery rate of about 95%, showing significant results. The eco-friendly packaging materials to be developed and introduced this time can be considered the ‘second Fresh Bag.’

Coupang received a score below 10 out of 100 in the ‘E (Environment)’ category of the ESG evaluation conducted last year by the ESG evaluation specialist organization, Sustainable Development Institute. This score is considered ‘vulnerable’ and is the result of quantitative analysis by artificial intelligence (AI) based on the company’s disclosed information. It is the lowest level among the six ESG performance evaluation stages: ‘Vulnerable - Insufficient - Average - Good - Excellent - Outstanding.’

Coupang’s environmental score is significantly lower compared to its ‘S (Social)’ and ‘G (Governance)’ scores. The social category scored in the 40s, which is ‘average,’ while governance scored in the 80s, which is ‘outstanding.’ A representative from the Sustainable Development Institute stated, “(Coupang) was analyzed to have insufficient management levels in the environmental sector compared to the industry. In e-commerce retail, environmental issues such as excessive waste of insulating materials during product transportation arise, necessitating environmental risk management.”

As ESG management becomes an important indicator for corporate evaluation and financing, the competition for eco-friendly delivery in the e-commerce industry is intensifying, which is also accelerating Coupang’s efforts. Naver has introduced a smart packaging solution to prevent excessive packaging, and SSG.com has introduced the reusable packaging ‘I'll be bag’ for some dawn delivery volumes. SSG.com will soon apply eco-friendly packaging materials to general delivery as well.

Eco-friendly packaging is also necessary to stabilize packaging costs. The unit price of disposable packaging materials is soaring, and variables such as increased environmental charges are significant. The unstable supply due to the corrugated cardboard shortage is also cited as a reason for developing alternative packaging materials. An industry official said, “Eco-friendly delivery has become as important as fast delivery in the e-commerce industry,” adding, “It is highly likely that Coupang will continue to make various efforts, such as operating logistics centers with renewable energy.”